|Direct economic value in ISK million*
|Wages and related expenses
|Dividends to shareholders
|Income tax and special tax
|Total economic contribution
|Proportion of economic contribution of gain
**Less impairment of PPE and grants.
Landsbankinn has not assessed risk from climate change especially. The Bank nevertheless deems it necessary to closely monitor climate developments, both in relation to business opportunities and impact on customers.
In recent years, emphasis on sustainability and corporate social responsibility has increased greatly, both in Iceland and abroad. The business environment is changing and performance in these matters is beginning to affect risk assessment in corporate operation, as well as the assessment of growth opportunities. New research shows a positive correlation between companies' emphasis on sustainability and profit. Landsbankinn's partners also increasingly demand that the Bank evaluate customers with respect of sustainability, both in the lending and investment process. There is every indication that emphasis on sustainability will continue to grow in coming years.
Toward the end of 2016, Landsbankinn Economic Research began gathering responses from companies listed on Nasdaq Iceland's main list to a simple, standardized questionnaire that pertains to the main elements of sustainability, environmental issues and gender equality. The questionnaire represents Landsbankinn's first steps to gathering information about how listed companies approach these matters and analyse developments in the domestic market.
The questionnaire was intentionally simple in order to elicit the basic elements of companies’ sustainability work and encourage them to review such matters. The questionnaire and other information gathering will develop over time. Most companies are already working on sustainability issues and the response has been good. Responses to the questionnaire were made available to investors via a dedicated Landsbankinn website. To date, the responses are only for the attention of investors and Economic Research does not evaluate the answers. The questionnaire is a tool investors can utilise to evaluate companies' performance in ESG matters. In the long term, the aim is to give more weight to these issues in the evaluation of investment opportunities.
In addition to paying mandatory pension premiums, Landsbankinn pays the equivalent of 2% of employee wages to a personal pension fund for the first three years of employment and 7% for subsequent years. The right to this payment is subject to the same rule as other seniority rights for employment at other financial undertakings. No other future liabilities due to pension plans are on the Bank's books. No future liabilities due to incentive systems are on the Bank's books.
The National Treasury is Landsbankinn's largest owner, holding 98.2% of shares in the Bank. The State's holding in the Bank is not considered a government grant.
Landsbankinn defines Iceland as its local community. All Directors of the Board are Icelandic and all but one reside in Iceland. The CEO and managing directors are Icelandic and reside in Iceland.
Landsbankinn defines Iceland as its local community and endeavours to do business with Icelandic suppliers in so far as this is economical. In rural areas, the Bank endeavours to do business with local providers, provided they fulfill the requirements of the Bank's Procurement Policy.
The total number of suppliers to Landsbankinn with over ISK 500,000 in turnover in 2019 is 697. Domestic suppliers are 606 and 46 thereof have a contract with at least a 1-year term. International suppliers are 91, 53 of which have contracts with over 1-year terms. These suppliers represent 100% of the Bank’s procurement, as all significant suppliers have a contractual relationship with the Bank.
Total payments to suppliers in 2019 amounted to ISK 6,994 million. Procurement in Iceland is in Icelandic króna and accounted for 89% of total purchases by the Bank in 2019. These figures are on a group basis.
Procurement from abroad is for the most part linked to information technology and main expenditures are as follows:
Landsbankinn has a policy on measures against bribery and corruption. The policy provides for effective organisational and managerial processes to minimise the risk of corruption and bribery in Landsbankinn's operation and in relations with customers, employees, regulators and other authorities, shareholders, auditors, competitors and other stakeholders.
This policy reflects the United Nations Convention against corruption, enacted in Iceland in March 2011, Article 264 (a) of the General Penal Code No. 19/1940, Landsbankinn's Rules of Procedure and its Covenant of Ethical Conduct.
The Bank’s Compliance function carried out a risk assessment of fraud actions to combat money laundering and terrorist financing in the Bank’s key divisions in 2019.
New employees at Landsbankinn receive special instruction and training about the Bank’s main rules, including rules on conflict of interest, notification of misconduct and actions to combat money laundering and terrorist financing.
The Board of Directors and the CEO receive special instruction and training at the outset of employment as part of preparation for their eligibility assessment, carried out by the Financial Supervisory Authority of the Central Bank of Iceland. Managing directors undergo a similar eligibility assessment carried out by Compliance. Landsbankinn’s policy against bribery and corruption extends to the duty of superiors to inform and instruct, as such instruction shall aim to increase employee awareness of measures against bribery and corruption and information about how to respond to suspicion of bribery and corruption.
Landsbankinn has set policies intended to support the Bank's measures against bribery and corruption, including the policy on conflict of interest, the policy on actions to combat money laundering and terrorist financing and the compliance risk policy. Landsbankinn’s rules on conflict of interest set out the Bank's main measures to mitigate risk of conflicts of interest damaging customer interests. The rules also identify possible conflicts of interest that may arise between customers, between customers and the Bank, and within the Bank.
Landsbankinn has also set various other special rules to prevent conflict of interest, including rules on the separation of operating segments (Chinese walls) and access to facilities, rules on employees’ securities transactions, as well as general rules on work procedures that provide for employees’ participation in business ventures and board membership, and gifts and hospitality trips.
The Bank has processes and work descriptions in place with regard to employee misconduct. Compliance receives notices of employee misconduct and handles such cases in cooperation with Internal Audit.
Landsbankinn has also adopted rules on protection and support for whistle blowers, which are regularly presented to employees.
Landsbankinn's rules on measures to combat money laundering and terrorist financing provide for the Bank’s main actions to combat such practices, through due diligence on customers, ongoing monitoring, the obligation to report suspicion of money laundering, internal processes, control and instruction to those units within the Bank that are sensitive to money laundering, conflict of interest and fraud.
Employees receive regular instruction on actions to combat money laundering and terrorist financing.
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